A quarter of the North American population never visits theaters

When it comes to the movie box office, bright spots like Ralph Breaks the Internet, Creed II and A Star Is Born are lifting the spirits and fortunes of Hollywood studios.

It is much-needed good news as theater attendance continues to decline. In the U.S. and Canada, fewer people went to the movies in 2017 than any year since 1992, leading to a 5.8 percent decline in theater admissions.

To reverse the box office decline, studios must change the way they launch and market new releases. Consider this: about one-quarter of the U.S. and Canadian population never goes to the movie theater, yet the lion’s share of movie promotion budgets are still allocated to mass media that reaches the broadest possible audience without any personalization or individually tailored messaging. Put another way, studios are wasting valuable advertising dollars on approximately 90 million people who are not receptive.

Studios are wasting valuable advertising dollars on approximately 90 million people who are not receptive.

There are more efficient ways to get through to audiences. Using the most up-to-date marketing techniques—that is to say, methods that go beyond the release of a teaser trailer and TV blitz—is particularly crucial when it comes to niche films whose marketing budgets often do not allow for expensive media placements. It is also highly effective.

Take studio A24’s art house horror flick Hereditary. The release pulled in nearly $75 million at the box office on a $10 million budget, thanks to a focus on highly relevant digital marketing and virtually no TV advertising.

So, what can movie studios do?

Focus on actual movie ticket buyers

More than half of all movie ticket purchases come from frequent moviegoers who go to the theater at least once a month. Focusing on engaged customers is a far more efficient way to drive ticket sales than spray-and-pray tactics reaching uninterested audiences.

Studios must be able to differentiate between frequent movie ticket buyers and everyone else. Previous movie ticket purchase data is key to understanding who is going to theaters, how often and their preferred genres and movie titles.

When it comes to where to engage buyers, marketers shouldn’t wait for them to visit movie-focused sites like IMDB and Fandango. The most successful campaigns engage movie buyers across the internet on their favorite sites.

Tailor messages for relevancy

Studios can look at past purchase data to understand which movie someone will be most interested in seeing (as opposed to making assumptions based on demographic data) and then deliver messages that are tailored to that individual. For example, an ad can encourage a frequent moviegoer to choose one movie title over another for their next visit to the theater.

Naturally, the approach must differ for infrequent moviegoers who go to theaters just a few times a year. Studios are competing for their entertainment dollars, not movie dollars, so the message may encourage a movie premiere instead of a concert or sporting event.

There are many other ways to tailor messages according to location, device preferences, etc. Adding personalization can also boost studios’ bottom line: Research shows that people are more likely to make a purchase when personalized experiences are offered.

Think broader than opening weekend

Many marketing campaigns aim to bring movie buyers in just for opening weekend, but the movie lifecycle is broader. Typical movie campaigns run for the week preceding opening weekend, which isn’t long enough to drive opening weekend purchases.

There’s also value in keeping campaigns going after the premiere since many moviegoers often wait to see a movie in theater. We are seeing campaigns that run an additional week earn an average of 56 percent more box office transactions during that period. Then there are the really avid buyers who may want to purchase a movie on-demand or on Blu-ray (or both) weeks later. Continuing a digital campaign can keep a film title top-of-mind for enthusiasts as the movie lifecycle goes on.

Ideally, a campaign will span the weeks leading up to and including the premiere, as well as the week after the premiere, around 25–37 days in total.

Using these techniques, movie studios can achieve what all marketers have always strived for: messaging down to the individual—ideally those who are most likely to buy—along with accurately measuring the effect of those efforts on sales. The result could be a much happier ending for Hollywood.